Increase in Founder and Management Equity

Upon completion of agreed-upon impact targets, the investor agrees to forfeit a portion of the investor’s equity. The idea is that a forfeiture of the investor equity results in a relative increase in founder and management equity.

Sample language: [For every] OR [Upon completion of [specify impact target], the Company shall have the right to cause the forfeiture of up to [X Preferred Shares] or [X percent of the Preferred Shares], which forfeiture may be structured as a redemption of Preferred Shares at an agreed upon nominal value.